And, simultaneously to the numerous measures required to simplify the tax system, there are many other essential measures that should be taken to improve the regime from an economic perspective, such as the execution of a considerably higher volume of agreements to avoid double taxation and to provide an encouragement to the internationalization of Brazilian companies, which are currently seriously taxed with respect to the results obtained by their subsidiaries abroad.
TAX INCENTIVES ALREADY EXIST FOR INFRASTRUCTURE INVESTMENT. HOW SUCCESSFUL HAVE THOSE INCENTIVES BEEN?
Until now, these incentives have not been very successful. As mentioned above, the tax incentives for investments in infrastructure are required and welcome, but they have been specific and limited in their scope. There is often not much reason to try to avail of these incentives as the general context is very complex. Sometimes, ironically, qualifying for the incentive seems much more complicated than simply paying the exonerated tax, inview of the conditions imposed and, as always, the ancillary obligations noncompliance which result in loss of the incentive.
WHY IS IT IMPORTANT TO INSTRUCT A FULL SERVICE FIRM LIKE LOBO & DE RIZZO TO ADVISE ON TAX ISSUES?A full service firm like Lobo & de Rizzo can see the different perspectives that need to be taken into consideration to inform the decision-making process. It is usually said that, in Brazil, the option between doing something in one or another form depends on the tax impact of each alternative. Since the environment is very complex, it is important to be able to depend on the advice of consultants who see beyond the tax matters under discussion.
Eduardo Martinelli Carvalho, tax partner
Tel: +55 (11) 3702 7027
Lobo & de Rizzo Advogados
Avenida Brigadeiro Faria Lima, 3900
São Paulo, 04538-132, Brazil
Tel: +55 (11) 3702 7000